Men's Fashion Line Trades Down

JOE Joseph Abboud Will Get More Casual as It Moves to Penney From Macy's

By

Ray A. Smith

Updated April 15, 2009 11:59 p.m. ET

Shoppers are trading down, and so is men's fashion label Joseph Abboud. The brand, known for unusual marketing strategies like dressing National Basketball Association coaches, is moving its JOE Joseph Abboud clothing, now sold at Macy's, to J.C. Penney this summer.

At the same time, the line, which targets men in their 20s and 30s, will shift its focus from dress clothing like suits and sport coats, to more sportswear like jeans and sweaters.

The deal reflects one of the harshest and most tumultuous periods in decades for retailers and fashion companies. Store operators are aggressively dropping brands that aren't selling well. Other retailers, meanwhile, are scooping them up, tweaking the designs, and locking them into exclusive supply agreements, hoping to attract more shoppers.

ENLARGE

A cotton textured crewneck sweater, cotton shirt and jeans that are part of the JOE Joseph Abboud menswear line for J.C. Penney.
J.C. Penney

Under Penney's deal with Joseph Abboud owner JA Apparel, which the companies plan to unveil this week, the retailer will sell JOE brand textured argyle cotton sweaters, cotton cord trousers, microsuede bomber jackets and other items in 600 of its 1,100 stores nationwide, starting with a new Manhattan store opening in July.

To weather the recession, Penney has been trying to carve out a niche slightly above discounters like Target and Wal-Mart Stores, but slightly below traditional department stores like Macy's and Dillard's. Last week, Penney said its same-store sales -- or sales at stores open at least a year -- fell 7.2% in March.

Macy's, which carried the JOE brand for the past three years, is discontinuing it because customers preferred its store brand Tasso Elba, says Jim Sluzewski, a spokesman for the chain. JOE "was not a growth brand for us," he says.

JA Apparel declined to comment.

Macy's same-store sales fell 9.2% in March.

Getting the Abboud line is part of Penney's broader push to woo style-conscious shoppers, who in the past wouldn't have considered the Plano, Texas-based chain. It has devoted most of that effort to women's fashion, striking deals with celebrities and designers such as Kimora Lee Simmons,Charlotte Ronson, and Allen B. Schwartz. Earlier this month, Penney announced a home-decor line from supermodel Cindy Crawford.

"We're playing a little catch-up with men's" on the fashion side, says Steve Lawrence, Penney's executive vice president of men's apparel, which accounts for 20% of the retailer's $18.2 billion in annual sales.

"As a store, they were either very traditional or very contemporary -- but nothing in the middle so that's where we play," Marty Staff, chief executive of JA Apparel, says of Penney, adding that he saw the retailer as a good fit since consumers are increasingly seeking value in this environment.

American menswear designer Joseph Abboud launched his eponymous line -- heavy on earth tones and textured fabrics -- in the late 1980s. He rose to prominence in the early 1990s, winning back-to-back menswear designer-of-the-year awards from the Council of Fashion Designers of America, and outfitting personalities such as broadcaster Bryant Gumbel.

In 2004, U.S. private-equity firm J.W. Childs Associates LP bought the company that owns the Joseph Abboud trademark for $73 million. Mr. Abboud clashed with the new management, left a year later, and now runs his own brand, called jaz.

The JOE line has adapted the Joseph Abboud label's signature herringbone fabrics and warm, muted colors. Its clothes for Penney will have texture such as ribbed fabrics or patterns. "You won't find any solid basic, short-sleeve T-shirts," says Mr. Staff.

Penney plans a multimillion-dollar marketing campaign for the JOE Joseph Abboud launch, including TV and print ads and an email push.

Other plans include a block party in Midtown Manhattan in July, featuring guest appearances by professional basketball players, and a fashion show and, later, in-store appearances by professional sports stars.

Prices for JOE start at $50 for cotton shirts, sweaters and jeans, about 50% more than starting prices in Penney's most basic lines. It can be tough to make such premium prices stick, especially amid a recession. Last summer, Penney had to lower its prices on American Living, a line of apparel, accessories and home furnishings designed by Polo Ralph Lauren. The company says the line's performance has improved as a result.

With its Penney deal , JA Apparel runs the risk of upsetting the high-end stores that market its higher-priced Joseph Abboud collection. Mr. Staff, however, says he consulted with the label's key retailers and that they were supportive of the move.

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